☕️ Just not feasible

Why Germany can't kick its Russian gas habit...
April 23, 2022 View Online | Sign Up | Shop

Morning Brew

The Ascent

Good morning. Today is National Shakespeare Day, because while we don't know exactly when Willy was born in April 1564, the 23rd seems like a pretty good bet.

Scholars suggest we celebrate the legendary playwright by talking like Shakespeare for a day. Here are a few tips:

  • Instead of saying "it," simply use the letter "t" ('tis, I'll do't, 'twould).
  • Make your verbs sing by adding "eth" to the end.
  • When you're mad, yell, "I bite my thumb at you!"
  • In the middle of a conversation, abruptly peel off and recite a monologue.

Neal Freyman, Matty Merritt, Jamie Wilde

MARKETS

Nasdaq

12,839.29

S&P

4,271.78

Dow

33,811.40

10-Year

2.917%

Bitcoin

$39,608.36

Alphabet

$2,392.71

*Stock data as of market close, cryptocurrency data as of 7:00pm ET. Here's what these numbers mean.

  • Markets: The Dow tumbled to its worst day since 2020, and the S&P 500 posted its third weekly loss in a row, with investors seriously bugging out about upcoming rate hikes. This week, Fed Chair Jerome Powell gave his most aggressive comments thus far about battling inflation, and traders are penciling in a meaty half-percentage-point increase at each of the next three Fed meetings.
  • Maybe this is why: A key measure used to track investors' inflation expectations reached its highest level in two decades. Treasury Secretary Janet Yellen admitted that high inflation will likely last "for a while longer," but also said that price growth may have peaked.

ENERGY

Why Germany can't quit Russian gas

A BASF plant in Germany UWE ANSPACH/DPA/AFP via Getty Images

Since the beginning of the war in Ukraine, the EU has paid more than $37 billion for Russian energy supplies—a big chunk of that by the bloc's No. 1 economy, Germany. While pressure is mounting on the country to stop financing Putin's war efforts with energy purchases, politicians there say the economic toll is just too large to do so immediately.

That toll: The country's central bank reported yesterday that an embargo on Russian gas would plunge it into a recession. Instead of Germany's economy growing by 3% this year, it would shrink by 2%, amounting to one of the worst recessions in the country since the financial crisis.

How we got here

Up until the invasion, 55% of Germany's imported gas came from Russia—a trade relationship that dates back to 1970. But since then, Germany has become even more dependent on Russian gas; as it wound down other power sources, such as nuclear and coal, it didn't build up enough alternatives to replace them. As a result, cutting off Russian gas would force some of Germany's industrial production to shut down and put an estimated 400,000+ people out of work.

  • "We can't live without gas," Mads Ryder, the CEO of porcelain manufacturer Rosenthal, told the FT. "We don't have an alternative energy source."
  • German businesses would face their "worst crisis since the Second World War" if a gas embargo were put into effect, Martin Brudermüller, the CEO of chemicals giant BASF, warned.

Still, Ukrainian leaders are playing the world's smallest violin, contending that Germany has a moral imperative to stop the flow of Russian energy. When the German president announced a visit to Kyiv last week, Ukraine said he wasn't welcome.

Big picture: With an immediate gas embargo seemingly off the table, Europe is trying to get creative to reduce its consumption of Russian energy. This week, the EU unveiled a plan called "Playing My Part," which asks citizens to opt for public transportation over driving and to work from home three days a week.—NF

        

TOGETHER WITH THE ASCENT

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On top of all that, you won't pay a dime of interest until 2023. That's 0% interest on purchases and balance transfers until next year, plus no annual fee.

Streamline your credit card style and apply today.

WORLD

Tour de headlines

How I met your mother GIF How I Met Your Mother/CBS via Giphy

Is business travel back? Well, definitely not close to pre-Covid levels, but it is recovering faster than expected, according to American Express. Travel spend in March by S&P 500 clients was "well over over 50%" of its level in 2019, which execs hailed as a big win. Still, the broader travel rebound has been fueled not by companies, but by individuals: US consumers in AmEx's network spent 120% more on travel in Q1 than in the same period in 2019.

GOP to Twitter: Hold the receipts. House Republicans demanded that Twitter preserve all materials linked to Elon Musk's bid to buy the company, calling the board's opposition to the takeover offer "concerning." It tees up a potential investigation of Twitter over free-speech restrictions if Republicans were to win a majority in the House this November.

Where did Fallon get that owl? Jimmy Fallon has found something he's better at than breaking during sketches: hawking NFTs. On Tuesday, the late-night host tweeted about Moonbirds, an owl-themed NFT collection from tech entrepreneur Kevin Rose, and the collection's average price doubled by Friday morning. It gets weirder: The Moonbirds team doesn't seem to know if Fallon actually bought the NFT, or if it was a gift.

        

SOCIAL MEDIA

Don't count out Snap

Snapchat ghost with crown, sunglasses, gold chain, and foam fingers Francis Scialabba

Snap, the parent company of Snapchat, released its Q1 earnings on Thursday and, while it just narrowly missed revenue targets, its daily-active-user growth is lapping Facebook and Twitter. Snap's brisk growth over the past five quarters is a big win for the little ghost that, in 2016, many thought could have disappeared for good after Instagram copied its iconic Stories feature.

Snapchat's 332 million daily users is an 18% bump over the past year and a major dunk on Twitter's 217 million. What's Snap doing right? It's captured Gen Z hearts and downloads. It has 90% adoption for users aged 13–24 in the US, UK, and the Netherlands.

  • It did this by perfecting its messaging platform and leaning into augmented reality features, according to journalist Alex Kantrowitz. Snap reported that 250 million users use its AR functions every day.

Here's where it got tripped up: Snap grew revenue by 38% this year, but said that Russia's invasion of Ukraine scared advertisers into pausing campaigns for a little over a week, denting sales. The platform is also still reeling from Apple's 2021 privacy update that limits ad tracking on iPhones.—MM

        

SCIENCE

The most powerful particle accelerator is back online

The Large Hadron Collider Lionel Flusin/Getty Images

Scientists at the European Organization for Nuclear Research (CERN) flipped the Large Hadron Collider's "on" switch yesterday. OK, we're assuming the process was more complicated than that, considering the world's most powerful particle accelerator could soon prove the existence of dark matter and discover the fifth force of nature.

This is the machine's third run, following its groundbreaking discovery of the Higgs boson particle in its first. It's since been upgraded with more powerful magnets to help it do its job.

And what exactly is that job?

The Large Hadron Collider—which is 20 miles long and nestled about 300 feet beneath the Alps—uses colder-than-outer-space magnets (colder = more magnetic) to accelerate particles close to the speed of light. It sends those particles hurtling toward each other until they smash together, "akin to firing two needles 10 kilometers [6.2 miles] apart with such precision that they meet halfway," CERN said.

Scientists watch the whole process like it's a new Severance episode and make observations about teeny-tiny particles that reveal the mysteries of the universe. Nbd.

Zoom out: Scientists are questioning physicists' existing theory of how the universe works, called the Standard Model. What's revealed by the Large Hadron Collider could confirm the Standard Model, or pave the way for a new "theory of everything."—JW

        

GRAB BAG

Key performance indicators

Computer with coins falling out Francis Scialabba

Stat: Crypto companies have suffered 37 hacks in the last 38 weeks, amounting to $2.9 billion worth of crypto robbed. The latest theft was last Sunday, when an attacker made off with $182 million from the decentralized finance (DeFi) project Beanstalk. It was the fifth-largest crypto theft on record.

Quote: "I think I'm making history right now. I've never been on a program talking about the demise of that program."

Matthew Belloni, a founding partner at Puck News, cracked a joke during an appearance on the final episode of Reliable Sources Daily, a program on CNN+ that's being shut down along with the rest of the streaming service.

Read: Pop stars on life after the spotlight moves on. (The Guardian)

        

CARTOON

Saturday sketch

Saturday sketch about how to keep work out of your vacation Max Knoblauch

        

TOGETHER WITH ETORO

eToro

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WHAT ELSE IS BREWING

  • Florida Gov. Ron DeSantis wasted no time in signing a bill that revokes Disney's special tax status that dates back to 1967.
  • Guns topped car crashes as the leading cause of death for US children and teenagers in 2020, according to the CDC.
  • French President Emmanuel Macron and challenger Marine Le Pen made last-ditch appeals to voters ahead of a runoff election tomorrow.
  • Europe's summer last year was the warmest on record.

BREW'S BETS

Help improve the simulation: And leave your Earth reviews.

Fresh podcasts: 1) Who's calling the shots in the beauty industry 2) How a family member's incarceration shaped this cannabis CEO's future 3) Why you may need to save less for retirement than you think.

Weekend conversation starters:

GAMES

Brew crossword

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FROM THE CREW

Enter our YouTube giveaway

Morning Brew's YouTube giveaway

In this episode of Street Value, we hit the streets of New York to find out which famous CEO people would trust with their future. Subscribe to our YouTube channel and leave us a comment on the video, and you'll be in the running to win $500. We'll pick three lucky winners on April 25. Watch now.

*Terms and conditions apply. US entries only.

         

Written by Neal Freyman, Jamie Wilde, and Matty Merritt

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